My guess is you're either not doing the motions on your turn, or your motions aren't close enough to the other models on the screen. The one part that made me fail once or twice was when you point the wiimote up to the right because I kept putting it down right after even though I was supposed to keep it held up for a while. My advice is to just follow the dance as closely as you can to the finest detail. Don't half ass it just because you feel stupid for doing it.

Yes, Im sure. Im thinking that my Wii remote is not connecting to the Sensor Bar so its not picking up my moves but still they should have made that level less senstive if it was a must beat level to move on.

Ahh it took me and my boyfriend AGES to beat this, on the marching part we wasn't marching with them, and that makes them point in the air and to the right, and we were trying to point in time but that wasn't it. You gotta keep marching, maybe this is your problem? Sure was with us.

FYI, the sensor bar is not used at all in that level, only internal wiimote gyros and the like are used.
Only a few poses in Wario ware use the sensor bar, like remote and finger food or whatever it is.

I think I got the answer for this question. You are supposed to ALWAYS dance, not just when the remote is being slapped on your butt. Wave the WiiMote around exactly as the character is doing during the entire dance. If the WiiMote is not moving while there is some dancing going on, the other 3 dancers infront of you will point at u in failure. =)